All Forum Posts by: Tyler Warrick

In that case, yes DSCR loans closed in an LLC will not report to personal credit and won't affect your DTI.

Just make sure you do your due diligence as not every lender who closes a DSCR (individual or LLC) loan will avoid reporting to personal credit. A ton of brokers on here will take a DSCR loan to UWM and UWM will 100% report that on personal credit these days.

Greg brings up a good point, but keep in mind you can only offset the subject property income by using 75% of the rent UNTIL you file it on your tax returns. Only at that point can an underwriter recognize it as an income producing property.

This should be a relatively easy and straight forward loan, @Christine Barker. I'm late to the game, but have heard great things about @Jacob Sherman. You'd be in good hands with him. 

Hey @Kimberly T. there sure are! I do these. Happy to price it out for you. Feel free to reply here or reach out in DMs if you'd like to keep it private.

Things I need to know: 1) Estimated Value 2) Current mortgage balance 3) Line amount requested 4) Estimated Credit Score

Hey @Kris Allen, congrats on reaching out. This is the first step. Just sent you a DM.

@Joseph Fenner great question.

When House Hacking, you are required to move into the property as your new primary residence. You will only be approved for an FHA loan if you make this your new primary. You'll be required to document that you can keep your existing job while moving to another state, or you'll have to document a new job you have in that new state.

If you have a remote job, this is relatively easy to prove (email/letter from HR) and can be a great way to house hack. You'll need a 580+ credit score, 3.5% down payment, closing costs (2-4% of purchase price depending on credit score and state), and a DTI of no more than 57%.

Depends what your goals are, @Connor Castillo.

If you are simply after cash flow: pay off the debt

If you are confident in your strategy, use leverage to obtain more properties. This will also have the added benefit of appreciation on two (or more) assets instead of one. 

If you are looking at Cash on Cash Return, real estate tends to be a slower growth model (unless you dip your toes into flips instead of buy and hold).

Hey @James Yang great questions, and I'll try to provide perspective below. There are two schools of thought.

1) Least money down/more money in the bank: If you are not worried about monthly payment, least money down is a big hit. If you're buying a primary residence, you'll likely be getting a rate in the 5-7% range depending on loan product, and whether you buy down the rate or not (think tax benefits). Most people purchasing in the +$1M range will likely also be investing in the stock market. Less money down means more money that can go into your rehab/stock market (I'm assuming you will make more than 5-7%).

2) Low payment focus: If you prioritize stability of lower payments and are risk adverse, putting more money down is something to seriously consider. No one can say for certain if/when rates will go down (although signs point to rates coming down). 

*Keep in mind you must be on title for 12 months before you pull cash out via a Cash Out Refinance.

**If you're considering putting 10% down or more, consider putting 5% less down and instead use those funds towards a buy down. This typically results in 1) less cash to close 2) lower monthly payment and 3) tax benefits. If you itemize your taxes, this may be used as a write off (I am not a tax professional, so please consult with your tax preparer/cpa etc etc).

Hi @Selina Giarla, great questions.

I want to clarify that DSCR loans have 30 year fixed rate options (as well as ARMs, IO, 40 year terms etc.).

Assuming 800 credit, and 25% down, 5-8 unit: a no point DSCR loan could be in the high 8s/low 9s.

Hey @Rajiv R. good questions. Pretty much everything is negotiable in real estate.

Loan Origination is how much the lender is going to make on the file (if direct lenders: this is typically a junk fee; if brokers: this is your loan officers compensation).

Points: this is the cost for the rate itself (if direct lenders: this can be negotiated, as they manufacture the rate sheet with profit baked in; if brokers: the rate is the rate, you are getting bottom of the barrel pricing).

Credit report/appraisal: these are the actual costs -- no money can be made. Some credit providers charge $50, some charge $200 and you don't have control over this unfortunately.

Title fees: since you are purchasing, you probably didn't choose the title company, however this can be negotiated when you submit your offer. Title controls title's fees.

At the end of the day, your lender can only control the lenders fees. It's a misconception that lenders control all costs. This is what makes a loan officers job difficult -- estimating the third party fees from the beginning (they will get actual costs once in process).

Hope this helps!